We talked to Nicholas Laag of Prime Data Centers about financing and developing data centers.
First of all, how are you and your family doing in these COVID-19 times?
Nicholas Laag: We’re doing well. We’re very fortunate to have stayed healthy. The biggest downside for me, personally is the decreased ability to travel means that I can’t be with my extended family very much. I have a lot of family in Europe. I grew up in Sweden, but I now live in California with my wife and two daughters.
Tell us about you, your career, how you founded Prime Data Centers.
Nicholas Laag: After university in Sweden, I joined Forum Partners in London, a principal investment firm serving small and mid-size real estate companies. After nearly 8 years with Forum, I began an exciting and unique chapter as the CEO of United Waters China in Beijing, delivering sustainable and high-quality water purification systems to both municipal and industrial users. During this time, I formed a partnership with two other entrepreneurs where we have been fortunate to build out 2 real estate platforms in Europe, of which one we took public. We founded Prime Data Centers with a vision of capitalizing on the growing societal importance of data centers by developing world-class facilities. Prime is a wholesale data center real estate developer, primarily serving large enterprise clients.
How does Prime Data Centers innovate?
Nicholas Laag: Prime Data Centers innovates in all facets of financing and developing data centers, but we place special emphasis on ecological sustainability and adaptability in terms of finance and usage. The data center industry is a leader in sustainability practices, and we aim to be amongst the top of the pack. That applies to the total carbon footprint of the facility itself, including key suppliers, such as the electric utility partner. Our data centers are partnered with some of the most sustainably-fueled electric utilities in the United States.
On the leasing side of the business, we developed the operating philosophy of “Partnership-as-a-Service,” which means that we tailor ownership or leasing solutions to the client. If they are a large enterprise and want greater control over the facility, we can enter into a joint venture “partnership” relationship. If they don’t need a high degree of control over the facility, we can instead enter into a turnkey or powered shell lease agreement. That degree of financial partnership is innovative in our industry.
How does the coronavirus pandemic affect your business, and how are you coping?
Nicholas Laag: COVID-19 has made all industries limit in-person contact as much as possible. For us, that means less foot traffic inside our facilities. Luckily for the data center industry, close in-person contact was never particularly necessary, so it wasn’t a major shift in operations. The biggest impact has been an increase in market demand for data centers. People around the world are spending more time online, which is increasing the need for data center capacity. We’re trying to envision the future demand patterns and to position ourselves to develop data centers to meet future demands.
Did you have to make difficult choices, and what are the lessons learned?
Nicholas Laag: We’ve been very fortunate not to be faced with nearly as difficult decisions as industries like entertainment, travel, and foodservice. That said, we have had to make difficult decisions around staffing. We are trying hard to internalize the lessons of the Black Lives Matter movement and to increase our efforts around Diversity, Equity, and Inclusion (“DEI”). For us, that means redoubling our efforts to recruit from underrepresented groups and make them feel included, respected, and empowered once they join the team. We partnered with Salute Mission Critical, which helps connect military veterans with highly skilled data center personnel job opportunities.
How do you deal with stress and anxiety, how do you protect yourself and Prime Data Centers in the future?
Nicholas Laag: I deal with stress and anxiety by getting outside and by listening to music. My favorite music to relax is jazz and rock music.
I strive to protect the company by building resilience into our culture. Resilience is a crucial aspect of data centers, to begin with. They must be resilient to natural disasters and disruptions of key supplies like water and power. We take that a step further and build resilience into our culture by encouraging our team to creatively plan for eventualities and contingencies that you might call “black swan” events. We also encourage our team to take their mental health seriously, whether that means managing work/life balance, stress relief, or anything else.
Who are your competitors? And how do you plan to stay in the game?
Nicholas Laag: Our competitors range from many relatively small, independent data center developers to publicly-traded global companies like Digital Realty.
We plan to stay in the game by continuing to provide industry-leading service and partnership to our clients. If we put our clients first and relentlessly focus on how their needs are evolving, we will continue to be one of the first names they think of when they need a data center, development partners.
Your final thoughts?
Nicholas Laag: My final thoughts are to focus on what matters. If we can take away something positive from COVID-19, it should be an increase in empathy. We should all be training our sense of empathy and using it to identify what really matters to people, and not just those people similar to us.
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